Seasonal price rises rescue pig farmers

PIG farmers able to stick out the tough times of the past two years are now reaping price rises of 50 per cent.

With pig numbers down 20 per cent, supply has been tight in the two weeks before Christmas, when demand for ham on the bone is the highest of the year.

Australian Pork Limited chief executive Andrew Spencer said the industry had taken a significant hit during the past year. The local product had been undercut by subsidised imports from Canada and Denmark, and further weakened by drought-driven high grain prices.

This time last year the local pork industry estimated it was losing $3.5million a week.

As at June this year, there were 240,000 breeding sows in Australia, down from 300,000 two years earlier. Each sow averages 25 piglets.

Mr Spencer said about 20 per cent of Australian pig farmers had left the industry over the past two years.

"That is one of the reasons why pig prices have improved a hell of a lot, so there is some profitability back in the industry," he said.

"But for a lot of people it is too late. They have gone and they have lost a lot of money."

Australians consume more than 54,000 tonnes of ham a year. Mr Spencer said the vast majority of cheap ham, eaten in sandwiches and salads through the year, comes from overseas, whereas the ham on the bone eaten at Christmas time was mostly the local product.

Only processed pork could be imported. But this had not stopped some manufacturers legally labelling imported ham and bacon that had been smoked and packaged in this country "Made in Australia".

Pork prices had risen in the past year from $2.40 a kilogram to $3.40/kg this month.

"That is a very significant improvement," Mr Spencer said.

"It is because supply is short, and that is a direct result of people getting out of the industry and the reduction in volume."

Ian Connaughton runs Girgarre Piggery, near Shepparton in northern Victoria. During the past year he cut costs but kept his 3200 sow herd.

"It has been difficult, because unfortunately the more animals we kept through the bad times, the more money we lost. But we wanted to be ready for when there was a change in the climate," he said.

In Victoria and southern NSW, producers were losing $40 to $50, or even more, on each pig they sold.

"I lost some of my friends. They exited the industry," Mr Connaughton said. "It was really sad."

But now supply was down and demand was driving up prices.

"We are expecting to see some reasonable months ahead for the pig industry," he said, adding it would take farmers some time before they recouped the losses of the past year.

Although the price of pork had risen, Mr Spencer argued, "the relativity of pork price versus red meat and chicken is still very, very competitive. It is still a cost-effective purchase, so I don't think at the consumer level there is anything to worry about."

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